Category: Stocks

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Business Stocks

My take on MSFT bid for YHOO

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Ballmer has been chasing Jerry Yang for a year, and today he ran out of patience. Interestingly enough, I learned it from CNBC first time (around 5:30 AM central time). Note, last time I watched early CNBC, it was Jan 22 global crash…so the lesson for me don’t get up too early 🙂

The desperation of Microsoft
After all these efforts, MSN search, MSN live space, blog, MSFT is still playing catch up with GOOG. Since it can not afford to buy GOOG, it is determined to get the No. 2 guy in web search, by paying more than 50% premium over yesterday’s YHOO closing price.

How Yahoo got here

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China Stocks

Yucheng Tech’s POS revenue

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I am always interested in recurring revenue business, debit/credit card transaction fee is one. Yucheng Tech (YTEC), the smaller rival of Longtop (LFT), is entering POS business this year. According to my friend Nawar Alsaadi’s analysis (quoted below):

“POS Revenue projections

The company mentioned in an investor presentation in February 2007 that the average business processed on a POS machine in China is 200,000 USD…Assuming an average transaction cost of 1.5% charged by the bank, the average revenue per machine will be $3000, and if we assume that Yucheng is awarded a 3rd of the transaction cost, this would net the company $1000 in transaction revenue per year. Thus, based on the company’s expected rate of merchant sign up, the company could generate as much as $50 million dollar in recurring transaction revenue by the end of 2009 as they sign up over 50000 merchants on their network…”

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Stocks

I am not a believer

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of this market. First is this Amazon bouncing back thing. Then is the whole market went up big, on the last day of the month. My initial sense is another windows dressing like it did on Dec 31. Note for mutual fund, hedge fund,…they all have monthly performance to meet. So take this last opportunity to pump up the stock, and make them look good.

For me, I started a kind of new strategy, I called it “swing”. I bought back some Mindray (MR) which I sold last week, because I had a limited GTC order of $32.98 in my account. This afternoon I sold some Crocs (CROX) when I saw it tried to break $35. And I set up a limited buy order of $32.50 following the sale.

By the way, Crocs just started the SoleUnited(tm) program, which will recycle used Crocs and donate new Crocs to the needy in Africa.

crocs pic

My point is to lower the cost of the stocks I hold. Because I don’t know which point is too high, which point is too low, why don’t take advantage of this market and swing it? I yet to do it for China Mobile, I’m under water on that one now.

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Stocks

Apple earning

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Not so good. iPod growth slowed (finanlly). iPhone can not make up the hole left by iPod. As I read from MarketWatch, while Mac is exploding, but it has one problem: with economy slowing, people won’t blow extra 1000 bucks for Mac (why not just buy a Dell).

I think Steve should do everything to bring iPhone to China Mobile, but he is so stubborn about his 20% to 30% cut…

Interestingly, I thought about it buying Apple puts last Tuesday (see my post China ADR crashed, scroll to short ideas). No, I have not actually done that because I decided not to bet on earnings. I view that as more risker than shorting a stock when the trend is clear (EDU).

MacBook Air

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China Stocks

William Ding Lei

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William Ding Lei is the founder, and Chairman of NetEase. He talked a little on the bubble in the stock markets during an interview lately (link here).

I shared Ding Lei’s insights because he has been through the full cycle of the stock market: right after NetEase (NTES) came to Nasdaq in 2000, the dot com crashed and his company’s stock traded under $1.00 for a few years, during that time he worked hard on the online gaming projects. Eventually the stock bounced back, went up as high as $100 (before split) because he made his company profitable.

股市本来虚高 暴跌回归本位

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Stocks

Who caused the 911 of Wall Street?

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I waked up at 5:30 this morning, and turned on CNBC. I knew all the markets are down last night, but I am still curious what the US market will look. One of the reporter in Tokyo says all the eyes are on the US Fed (hint a 75 base point cut). I went back to sleep afterwards.

I waked up again at 8:00 AM, I kind felt Mr. Bernanke and the Co. had the emergency meeting and will cut 75 pts.

Yes, it did. But there is one problem, the Dow and Nasdaq futures are still down a lot…

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China Stocks

Is sky falling in stock markets?

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It looks like it. On Monday Jan 21 we have the biggest drop of global stock markets in recent years (see the quoted news below).

I want to talk a little about the Chinese market in specific. It appears to me two pieces of news helped driving the market down. The huge secondary offering of $22 billion from Ping An Insurance (SHA:601318); the talk of starting stock index future market and a Nasdaq-like Market in China after March 2008, by Mr. Cheng Si Wei, Chairman of Finance Committe of National People Congress. 成思危：创业板和股指期货准备工作基本就绪.

But as individual investors I think we should remain calm even in this crazy market. It may be a good idea to get rid of some bubble-priced stocks because we are not going to see that price for a while. Note bubble is relative the intrinsic value of a company, not compared to the previous high price (e.g, VMW, AAPL, N,…are all risky to me).

Quoted news
AP news: stock markets plunge worldwide.

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Stocks

What if we are in a bear market: I

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Read this from trader818. While I don’t agree everything here, I think the principle applies. I also want to add one thing: if average down too many times (and never make money), something (the market or the stock) must be wrong. I learned the hard lesson from Longbottom (LFT).

最近有不少朋友问我大势这么差，是不是该逃跑，或者买点put hedge上。

我的观点是，从长期投资角度讲，现在已经出现很多值得关注的股票，该做的不是逃跑 , 而是参与。

熊市里面很难赚钱，特别要防范风险，选股票时候需要注意几个问题

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Business Stocks

Bush is more influential than Bernanke?

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(Update noon Jan 18) Opps, the Bush rally only last couple hours 🙁 Seriously, I do welcome this $1,600 per family tax rebate. Maybe a trip to Europe this Spring? Oh well, that won’t help the US economy directly.

(Original) I mean, to the stock market. Yesterday, after Ben spoke in Congress and painted a bleak picture of US economy, and asked for some sorts of stimulus package. The DOW tanked 300 points, S&P and Nasdaq did no better. Today as Bush is unveiling his economy package: good old things like tax rebate for individuals and business, the US market seems took the cue and is up in the morning. Another amazing thing is the Overseas market (Japan, Korea, Hongkong and Shanghai) also reversed course (last night). So when Bush speaks, the world listens 🙂

Just kidding. Seriously speaking, I think US president has little to do with the US economy cycle, nor can a Fed chairman. The US is heading to a recession, period. But see, the problem is people (include myself) don’t want to hear the harsh words, facing the reality. A few days ago in Michigan John McCain did his straight talk “some of the jobs lost (in auto industry) is not coming back, we need to re-train our people for new skills”, while his rival Mitt Ronmey says he will do everything to get back auto jobs. It’s so obvious that US auto industry is losing ground in the US market, but people still elected Mitt: the guy who tells white lies.

Healthcare cost for US companies

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Master Series Stocks

I decided not shorting EDU

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at this time.

New Oriental EDU logo

I was excited about shorting EDU or APPL (buying puts) after Tuesday’s MacWorld keynote and New Oriental disappointing earning news. I hoped to cover some of my loss from LFT (and to a less content CROX) by shorting the stocks, now that the market appears controlled by the bears. So I went and told my wife about the drop of New Oriental stock, broken shoes (CROX) vs. broken school (EDU) analogy, my wife said this:

“so now you are going to Du Da Xiao (a form of gamble in China), huh?”

So much for my fundamental analysis. Seriously I decided not to short the EDU due to two things:

1) In order to short a stock, I need to have Margin account. I did send the margin applications on Tuesday. But I decided to pull the application today, as I read more about it, and the story about Berkshire Hathaway stock once dropped more than 50%. Hypothetically, a person who bought BRK.A in its earning days won’t get the huge gains of BRK.A because he/she got margin call. Here is the story in Chinese. Quote here:

巴菲特2007年10月18日在接受福克斯新闻网商业频道的专访时，曾就“如何看待通过融资来购买股票或者说借钱买股票？”说：“我认为这有点疯狂。如果你看看伯克夏公司，我们买入的时候是7美圆/股，现在每股是129，000美圆。但在1974年期间，它的股价下跌了50%，2002年时，股价也从高点大跌50%。如果你的资金中有50%是通过融资获得的，则意味着你已经破产了。但你不应该因拥有一只从7美圆涨至129，000美圆的股票而破产。1987年，伯克夏的股价在两周内下跌了40%。因此，如果你通过融资来买股票，你的命运就掌握在他人的手里，这太疯狂了。”

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